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It's cool that Amazon's product is more advanced, and that's interesting technically... but what does that have to do with the Sonos IPO? Beats cost $18 to mak

It's cool that Amazon's product is more advanced, and that's interesting technically... but what does that have to do with the Sonos IPO? Beats cost $18 to make.. cheap plastic.. nothing premium about them.. they even put a few pieces of metal in it so they feel sturdy.. People love(d?) them. Sold for $200/pair. Company sold for $3b. The bill of materials isn't the sole determinate of success.

saagarjha 8y ago
To be honest, Beats was probably bought because of its streaming services rather than its brand image, though of course that's a nice bonus.
- rgbrenner 8y ago
  They had 1.5b in revenue in 2013 (the year before apple acquired them). Apple started talks just 4 months after beats music launched, and was said to put a price on it of $500m (out of the $3b): https://www.wsj.com/articles/apple-paying-just-under-500-million-for-beats-music-streaming-service-1401403287 https://www.wsj.com/articles/apple-paying-just-under-500-mil...
- skinnymuch 8y ago
  It was talked about when it was acquired. Beats streaming was mostly just their MOG acquisition at the time. The streaming service was a fraction of the purchase price.
dalbasal 8y ago
Totally aside... I don't really understand why beats gets singled out so often, when it comes to cost of components. IDK, I feel like beats doesn't get enough credit as a company. First, if you look at a shelf of products (say an airport gadget shop), beats is not the worst value on the shelf. Most beats products are OK. Half the gear (in general) in those shops is crap. Second, Beats did a good job on "product". They understood what price ranges to target. The understood what each form factor was for, and how to explain this to consumers. Beats' actual competition was earbuds, not alternative "studio headphones." They knew which sound qualities (bass, basically) customers would want, for the music they actually listen to while walking around a mall. They aren't always the best price performance across categories, but they aren't crap either. Anyway, the reason I think they deserve credit is not that. They understood the implication of "wearables." They are the ones that managed to build that company, with a foot in fashion and another one in electronics. Part authority on what's cool, part predictor of what's cool. If you do the bill of materials test on versace it won't go well. Compare beats as the fashion-tech-wearables brand to all the smartwatch attempts at similar. Beats stands out.
- xzel 8y ago
  I'm sorry but their sound quality is pretty abysmal for the price; there is a reason they're lampooned. I agree that a lot of the headphone market is poor but 20 minutes of googling will get you some good headphones for a decent price. That aside, I certainly agree with you they were able to build a brand, make mostly junk products pretty fashionable and sold a lot of merchandise.
  - dalbasal 8y ago
    You can say that about literally any major electronics brand. About 5 years ago I googled for the new "oneplus" which turned out to be a great phone at half the price of Samsung or LG. Unknown brand. Great deal. I was happy. Bought again. I also once bought soy sauce that wasn't kikkoman, half price and it tasted good. Go figure. This doesn't make Samsung or Kikkoman "junk." It makes them a brand name. Maybe I should put this differently.... If Beats announced today they are putting major effort into smart watches, I would expect to soon see lots of people wearing them. I'd beats to make smart watches that people want because they're relevant piece of culture and utility. If boss or plantronics announced the same... I wouldn't.
    - xzel 8y ago
      Yes I totally agree people really do buy things because of celebrity endorsements and don't do their own research before buying most things. Its mind boggling to me but hey to each his own. Tangent-y but I feel the worst for the people who have their iPhone/Apple headphones turned up to 11 b/c the earbuds don't fit their ears well, and you know, everyone in the bus/metro/subway with them that have to listen to their music bleeding out of their ears, too.
      - dalbasal 8y ago
        I think if we reduce this to "people buy things because of celebrity endorsements" than there isn't much to talk about. Xerox invented the modern PC, Apple spent the next 30 years applying celebrity endorsements and marketing nonsense to make money. That's the story. I think this is very wrong. If you are selecting a component to put in a device, this is a mostly objective question. Price. Objective quality, longevity. For a person to get value out of a thing, you must cross into more "subjective" territory. If you refuse to rely on anything that is subjective, nothing about humans makes sense. Why do people want to look cool anyway? Why are people listening to music?
JshWright 8y ago
That was my thought as well... It was an interesting (if pretty high level) teardown, but all the leaps from a part to what that part "means" seemed like the author was trying to backfill a narrative.
b3b0p 8y ago
What is your source for the $18 worth of parts? How are you basing the sound quality? Keep in mind there is much more investment that goes into a consumer product, especially one like any of the Beats. There is design, engineering, marketing, testing, lawyers, copyrights, logistics/shipping... Many expensive headphones use plastic because of weight. Even the Sony MDR-Z1R have plastic. One of the only headphones I know that don't was the Sony MDR-R10, but from my understanding of the history of those, Sony was actually losing money on every pair sold ($2,500/pair). I'm not saying Beats are great, but they get picked on for reasons. It seems almost like a meme and they aren't a terrible product. They work well for what they are meant. People like the way they look. They are supported by one of the most iconic companies in the world and sold in every Apple Store (and many others) with a large variety of different models and colors. Bring them into any Apple Store when something goes wrong and even out of warranty you can sometimes get help from a Apple or a Genius and/or a replacement.
- seattle_spring 8y ago
  > I'm not saying Beats are great, but they get picked on for reasons The reasons are that anytime they're [rightfully] critisized in any way, a horde of obvious Beats purchasers comes and defends why it was reasonable for them to spend $350 on a pair of headphones with similar sound quality to a $50 pair from a different brand. They'll never admit they bought them for the name or the fashion appeal, they'll always claim that they "sound amazing," and pull up some irreverent review from Vice or similar saying that Beats are passable. If people just admitted that they don't give a shit about sound quality and want to look cool to their friends then I don't think it would have become such a meme.
  - iamdave 8y ago
    Those are some shallow and some honestly awful reasons to pick on one's choice of headphones and the people who buy them considering it's not your money being spent buying a pair of Beats headphones. It's theirs. They worked for it and earned it. I don't feel inclined to explain my financial decisions to random joes on the internet either. And maybe they do sound great to that wearer. You don't know. What sounds good enough for them might not be great sound to you. That's perfectly fine. Maybe they did buy them for how they look. Why make that your business? Why do you even care that that's why someone bought the headphones? I go back to my earlier position: it's not your money being spent. It's theirs. Taking people to task for subjective things like this seems like a very strange thing to lord over people for IMO.
wjnc 8y ago
Since nobody's answering. Amazon is demonstrating a possible further branching into the augmented speaker market, and demonstrating a quality build that suggests improvements still to come - that is a great threat to any incumbent (can one call a firm pre-IPO that) that is a lot smaller. Sonos is left to carve a niche in the non-augmented digital speaker market. Other comments on this thread show that at least their capabilities app-wise are mediocre. Going heads-up with Amazon while lacking skills in your obvious market... that's a risky gamble for an IPO investor. (Can't say I totally buy that, but the technical teardown was very cool.)
- gh02t 8y ago
  Yeah, the point is that Amazon's design costs more to produce and they sell it for a lower price. The Sonos design is more typical and $200 is probably closer to a "realistic" price. In other words, the design details from the teardown signal that Amazon is willing to eat losses on hardware, whereas Sonos can't afford to. Sonos doesn't have the alternative revenue streams that Amazon (and Google) have, making it hard to compete head on. I do think there is a niche for Sonos though, offering more music-focused options and sticking to the truly premium/high-end market, which Amazon seems less interested in. Google seems interested in that market segment with the Max, but I think they are still testing the waters so Sonos can still compete.
prolikewh0a 8y ago
I also didn't understand why there were teardowns when the advantages in the article have nothing to do with the teardowns.

saagarjha 8y ago

To be honest, Beats was probably bought because of its streaming services rather than its brand image, though of course that's a nice bonus.

rgbrenner 8y ago
They had 1.5b in revenue in 2013 (the year before apple acquired them). Apple started talks just 4 months after beats music launched, and was said to put a price on it of $500m (out of the $3b): https://www.wsj.com/articles/apple-paying-just-under-500-million-for-beats-music-streaming-service-1401403287 https://www.wsj.com/articles/apple-paying-just-under-500-mil...
skinnymuch 8y ago
It was talked about when it was acquired. Beats streaming was mostly just their MOG acquisition at the time. The streaming service was a fraction of the purchase price.

dalbasal 8y ago

Totally aside... I don't really understand why beats gets singled out so often, when it comes to cost of components. IDK, I feel like beats doesn't get enough credit as a company. First, if you look at a shelf of products (say an airport gadget shop), beats is not the worst value on the shelf. Most beats products are OK. Half the gear (in general) in those shops is crap. Second, Beats did a good job on "product". They understood what price ranges to target. The understood what each form factor was for, and how to explain this to consumers. Beats' actual competition was earbuds, not alternative "studio headphones." They knew which sound qualities (bass, basically) customers would want, for the music they actually listen to while walking around a mall. They aren't always the best price performance across categories, but they aren't crap either. Anyway, the reason I think they deserve credit is not that. They understood the implication of "wearables." They are the ones that managed to build that company, with a foot in fashion and another one in electronics. Part authority on what's cool, part predictor of what's cool. If you do the bill of materials test on versace it won't go well. Compare beats as the fashion-tech-wearables brand to all the smartwatch attempts at similar. Beats stands out.

xzel 8y ago
I'm sorry but their sound quality is pretty abysmal for the price; there is a reason they're lampooned. I agree that a lot of the headphone market is poor but 20 minutes of googling will get you some good headphones for a decent price. That aside, I certainly agree with you they were able to build a brand, make mostly junk products pretty fashionable and sold a lot of merchandise.
- dalbasal 8y ago
  You can say that about literally any major electronics brand. About 5 years ago I googled for the new "oneplus" which turned out to be a great phone at half the price of Samsung or LG. Unknown brand. Great deal. I was happy. Bought again. I also once bought soy sauce that wasn't kikkoman, half price and it tasted good. Go figure. This doesn't make Samsung or Kikkoman "junk." It makes them a brand name. Maybe I should put this differently.... If Beats announced today they are putting major effort into smart watches, I would expect to soon see lots of people wearing them. I'd beats to make smart watches that people want because they're relevant piece of culture and utility. If boss or plantronics announced the same... I wouldn't.
  - xzel 8y ago
    Yes I totally agree people really do buy things because of celebrity endorsements and don't do their own research before buying most things. Its mind boggling to me but hey to each his own. Tangent-y but I feel the worst for the people who have their iPhone/Apple headphones turned up to 11 b/c the earbuds don't fit their ears well, and you know, everyone in the bus/metro/subway with them that have to listen to their music bleeding out of their ears, too.
    - dalbasal 8y ago
      I think if we reduce this to "people buy things because of celebrity endorsements" than there isn't much to talk about. Xerox invented the modern PC, Apple spent the next 30 years applying celebrity endorsements and marketing nonsense to make money. That's the story. I think this is very wrong. If you are selecting a component to put in a device, this is a mostly objective question. Price. Objective quality, longevity. For a person to get value out of a thing, you must cross into more "subjective" territory. If you refuse to rely on anything that is subjective, nothing about humans makes sense. Why do people want to look cool anyway? Why are people listening to music?

JshWright 8y ago

That was my thought as well... It was an interesting (if pretty high level) teardown, but all the leaps from a part to what that part "means" seemed like the author was trying to backfill a narrative.

b3b0p 8y ago

What is your source for the $18 worth of parts? How are you basing the sound quality? Keep in mind there is much more investment that goes into a consumer product, especially one like any of the Beats. There is design, engineering, marketing, testing, lawyers, copyrights, logistics/shipping... Many expensive headphones use plastic because of weight. Even the Sony MDR-Z1R have plastic. One of the only headphones I know that don't was the Sony MDR-R10, but from my understanding of the history of those, Sony was actually losing money on every pair sold ($2,500/pair). I'm not saying Beats are great, but they get picked on for reasons. It seems almost like a meme and they aren't a terrible product. They work well for what they are meant. People like the way they look. They are supported by one of the most iconic companies in the world and sold in every Apple Store (and many others) with a large variety of different models and colors. Bring them into any Apple Store when something goes wrong and even out of warranty you can sometimes get help from a Apple or a Genius and/or a replacement.

seattle_spring 8y ago
> I'm not saying Beats are great, but they get picked on for reasons The reasons are that anytime they're [rightfully] critisized in any way, a horde of obvious Beats purchasers comes and defends why it was reasonable for them to spend $350 on a pair of headphones with similar sound quality to a $50 pair from a different brand. They'll never admit they bought them for the name or the fashion appeal, they'll always claim that they "sound amazing," and pull up some irreverent review from Vice or similar saying that Beats are passable. If people just admitted that they don't give a shit about sound quality and want to look cool to their friends then I don't think it would have become such a meme.
- iamdave 8y ago
  Those are some shallow and some honestly awful reasons to pick on one's choice of headphones and the people who buy them considering it's not your money being spent buying a pair of Beats headphones. It's theirs. They worked for it and earned it. I don't feel inclined to explain my financial decisions to random joes on the internet either. And maybe they do sound great to that wearer. You don't know. What sounds good enough for them might not be great sound to you. That's perfectly fine. Maybe they did buy them for how they look. Why make that your business? Why do you even care that that's why someone bought the headphones? I go back to my earlier position: it's not your money being spent. It's theirs. Taking people to task for subjective things like this seems like a very strange thing to lord over people for IMO.

wjnc 8y ago

Since nobody's answering. Amazon is demonstrating a possible further branching into the augmented speaker market, and demonstrating a quality build that suggests improvements still to come - that is a great threat to any incumbent (can one call a firm pre-IPO that) that is a lot smaller. Sonos is left to carve a niche in the non-augmented digital speaker market. Other comments on this thread show that at least their capabilities app-wise are mediocre. Going heads-up with Amazon while lacking skills in your obvious market... that's a risky gamble for an IPO investor. (Can't say I totally buy that, but the technical teardown was very cool.)

gh02t 8y ago
Yeah, the point is that Amazon's design costs more to produce and they sell it for a lower price. The Sonos design is more typical and $200 is probably closer to a "realistic" price. In other words, the design details from the teardown signal that Amazon is willing to eat losses on hardware, whereas Sonos can't afford to. Sonos doesn't have the alternative revenue streams that Amazon (and Google) have, making it hard to compete head on. I do think there is a niche for Sonos though, offering more music-focused options and sticking to the truly premium/high-end market, which Amazon seems less interested in. Google seems interested in that market segment with the Max, but I think they are still testing the waters so Sonos can still compete.

prolikewh0a 8y ago

I also didn't understand why there were teardowns when the advantages in the article have nothing to do with the teardowns.